Finance:Learn Investment From 10 Legendary Investors BANGALORE: Do investors agree that making money in the market comes with a dedicated strategy that is built around a set of rules? Think for a moment about your early days as an investor. Are you among them who jumped in with very little knowledge of the markets? Also if your only investing rule has been to not follow any rules, then you are probably disappointed with your results so far. Let’s have a look at some of the best investment tips from some well-known investors: 1. Warren Buffet Quote: “The first rule is not to lose. The second rule is not to forget the first rule.” Warren Buffett is arguably the worlds greatest stock investor. He is also a bit of a philosopher. He pares down his investment ideas into simple, memorable sound bites. Do you think his philosophy hold up in todays difficult environment? For Buffet his number one goal for investing is to “NEVER LOSE ANY MONEY” regardless of market conditions. He believes in buying stocks trading near their real asset value. He also avoids companies that have excess debt. Buffet then looks at the company’s track record tries to predict where the company is going to be 10 years from now. 2. Jack Bogle Quote: “Over the long-term, the miracle of compounding returns is overwhelmed by the tyranny of compounding cost” In simple terms, Jack Bogles investing philosophy supports capturing market returns by investing in broad-based index mutual funds that are characterized as no-load, low-cost, low-turnover and passively managed. He has consistently recommended that individual investors focus on the primacy of investing simplicity, minimizing investment-related costs and expenses, productive economics of a long-term investment horizon, reliance on rational analysis and an avoidance of emotions in the investment decision-making process and the universality of index investing as an appropriate strategy for individual investors. 3. Peter Lynch Quote: “Everyone has the brainpower to follow the stock market. If you made it through fifth grade math, you can do it” Peter Lynch was the star manager of Fidelity Investments and also author of several books on investment such as ‘Invest in what you know’ and ‘One Up On Wall Street’. His investment strategy was “Take your time to identify exceptional companies.” His thinking was almost similar to Warren Buffett, thus he always stuck to companies that he can understand. He as an investor never believed in following the herd and famously acknowledges that it’s futile to predict the economy and interest rates. 4. Dennis Gartman Quote: Be patient with winning trades; be enormously impatient with losing trades. Remember it is quite possible to make large sums trading/investing if we are right only 30% of the time, as long as our losses are small and our profits are large. Dennis Gartman began publishing “The Gartman Letter” in 1987. He is also an accomplished trader and a frequent guest on financial networks. His rule above addresses a wealth of mistakes that young investors make. According to him first, let winning trades run. Dont sell at the first sign of profits. Secondly, dont let a losing trade get away. Investors who make money in the markets are “OK” with losing a little bit of money on a trade but they are not “OK” with losing a lot of money. 5. Bill Gross Quote: Do you really like a particular stock? Put 10 percent or so of your portfolio on it. Make the idea count. Good [investment] ideas should not be diversified away into meaningless oblivion. Bill Gross is the co-chief investing officer of PIMCO and manages the PIMCO Total Return Fund, one of the largest bond funds in the world according to Investopedia. Mr. Gross rule speaks about portfolio management. A universal rule that most young investors know that is diversification or not putting all of your investing capital into one name. According to him diversification is a good rule of thumb but it also diminishes your profits when one of your picks makes a big move while other names dont. Making money in the market is also about taking chances based on exhaustive research. Always keep some cash in your account for those opportunities that need a little more capital and dont be afraid to act when you believe that your research is pointing to a real winner. 6. David Dreman Quote: If you have good stocks and you really know them, youll make money if youre patient over three years or more David Dreman is a famous investor who has written books such as ‘Contrarian Investment Strategy: The Psychology of Stock Market Success’. His investment strategy is that he believes in taking contrarian calls. He buys stocks that have a low price-earnings ratios, low price-to-book value ratios and higher than average yield. According to his belief his stock picking technique can outperform the markets always. 7. Carl Icahn Quote: You learn in this business … If you want a friend, get a dog. Carl Icahn is a private equity investor and modern day corporate raider, who buys large stakes in companies and attempt to get voting rights in order to increase shareholder value. Some of his holdings include Time Warner, Yahoo, Clorox and Blockbuster Video according to Investopedia. According to him there is only one piece of advice to act upon and that is your own exhaustive research based on facts obtained from trusted sources. Other advice can be considered and verified but it shouldnt be a sole reason to commit money. 8. Benjamin Graham Quote: “If you are shopping for common stocks, choose them the way you would buy groceries, not the way you would buy perfume” Benjamin Graham was a professional investor who influenced mind of people such as Warren Buffett and Irving Kahn. He is popularly known as the “father of value investing”. While coming to his investment strategy he sought companies with strong balance sheets, with little debt, above-average profit margins, and ample cash flow, according to Investopedia. 9. Bill Miller Quote: I often remind our analysts that 100 per cent of the information you have about a company represents the past, and 100 per cent of a stocks valuation depends on the future. Investment wizard Miller is the former Chairman and Chief Investment Officer of the famous Legg Mason Capital Management.He received honors for his distinct style, which focused on a detailed understanding of businesses and their intrinsic value. He is known as a self-described value investor, but his definition of value investing is somewhat disconcerting to some traditional value investors, according to Investopedia. Miller believes that any stock can be a value stock if it trades at a discount to its intrinsic value. 10. William J. ONeil Quote: The whole secret to winning and losing in the stock market is to lose the least amount possible when youre not right. He is the founder of business newspaper Investors Business Daily and of the stock brokerage firm William ONeil & Co. Incorporation. He is also an author of several books on investing. He is known as the inventor of the growth stock investing. He believed in holding on to the strong stocks and selling off the weak ones. His investment style is often called as CAN SLIM. This strategy helps to discover leading stocks before they make major price advances.
Posted on: Fri, 05 Sep 2014 16:32:24 +0000
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